Question

Three friends just out of culinary school have applied for a loan to open a new restaurant in the heart of New York City. The bank gives them a loan in the amount of 1.3 million dollars. The three friends estimate that their business will be able to make a profit of approximately $0.7 million per year. They keep track of their debts, profits, and overall financial status on a balance sheet. They enter the debt as a negative value and all profits as positive values. Define a unit for the amount of time since the company began. Enter a variable for the amount of time since the company began and use this variable to write an expression for the expected financial status. 1. What was the financial status of the company when it began? 2. If the estimates were correct, how many years was it before the financial status of the company was 14.8 million dollars?

Answer 1

The company had a financial status of -$1.3 million when it began. It took approximately 23 years for the company's financial status to reach $14.8 million.

Step-by-step explanation:

The financial status of the company when it began can be represented by the loan amount of $1.3 million. Since they entered the debt as a negative value, the financial status of the company when it began was -$1.3 million.

To find out how many years it took for the financial status of the company to reach $14.8 million, we can set up an equation using the estimated profit per year. Let's say the number of years since the company began is represented by 't'.The expression for the expected financial status after 't' years can be written as: -1.3 + 0.7t. We can solve this equation for 't' by setting the expression equal to 14.8 and solving for 't'.

-1.3 + 0.7t = 14.8

0.7t = 16.1

t = 16.1 / 0.7

t ≈ 23 years.

Answer 2

The answer is 0.3 million per year

Step-by-step explanation:

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